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  • FIRST POST
    • mubeye
    • By mubeye 28th Nov 17, 1:11 PM
    • 107Posts
    • 9Thanks
    mubeye
    sold shares ignorant of CGT. Any way I can avoid?
    • #1
    • 28th Nov 17, 1:11 PM
    sold shares ignorant of CGT. Any way I can avoid? 28th Nov 17 at 1:11 PM
    I just sold a bunch of shares in a taxable account, with a gain of about 20k

    It was dumb move as I don't need the cash, I just wanted to switch funds. And now I think I will owe tax.

    Can I reverse this somehow?

    This year I will earn 10k = 30k ltd company dividends a year. Any idea what rate I'll pay?
Page 1
    • ColdIron
    • By ColdIron 28th Nov 17, 1:17 PM
    • 3,661 Posts
    • 4,403 Thanks
    ColdIron
    • #2
    • 28th Nov 17, 1:17 PM
    • #2
    • 28th Nov 17, 1:17 PM
    Can you buy them back? How long ago did you sell?
    • mubeye
    • By mubeye 28th Nov 17, 1:19 PM
    • 107 Posts
    • 9 Thanks
    mubeye
    • #3
    • 28th Nov 17, 1:19 PM
    • #3
    • 28th Nov 17, 1:19 PM
    a couple of days ago
    • ColdIron
    • By ColdIron 28th Nov 17, 1:26 PM
    • 3,661 Posts
    • 4,403 Thanks
    ColdIron
    • #4
    • 28th Nov 17, 1:26 PM
    • #4
    • 28th Nov 17, 1:26 PM
    If you repurchase some of them within 30 days of sale it may not count as a disposal. Google Capital Gains, Bed and Breakfasting and the 30 day rule
    • Keep pedalling
    • By Keep pedalling 28th Nov 17, 1:43 PM
    • 4,074 Posts
    • 4,436 Thanks
    Keep pedalling
    • #5
    • 28th Nov 17, 1:43 PM
    • #5
    • 28th Nov 17, 1:43 PM
    Buy back enough shares to bring you gain down to £11,300. Then flog those on the 6th April to take your full gain tax free.
    • mubeye
    • By mubeye 28th Nov 17, 1:47 PM
    • 107 Posts
    • 9 Thanks
    mubeye
    • #6
    • 28th Nov 17, 1:47 PM
    • #6
    • 28th Nov 17, 1:47 PM
    ok will just repurchase the lot I think.

    bed and breakfast rules seem more about crossing tax years, and can't find crystal clear statement it is okay for me to do this, but I think my heart is in right place, so better ask forvieness than permission etc
    • jimjames
    • By jimjames 28th Nov 17, 1:50 PM
    • 12,237 Posts
    • 10,772 Thanks
    jimjames
    • #7
    • 28th Nov 17, 1:50 PM
    • #7
    • 28th Nov 17, 1:50 PM
    ok will just repurchase the lot I think.
    Originally posted by mubeye
    Why do that? If you wait you'll have made £11.3k of gains exempt for the future
    Remember the saying: if it looks too good to be true it almost certainly is.
    • ColdIron
    • By ColdIron 28th Nov 17, 2:02 PM
    • 3,661 Posts
    • 4,403 Thanks
    ColdIron
    • #8
    • 28th Nov 17, 2:02 PM
    • #8
    • 28th Nov 17, 2:02 PM
    If you buy them all back you're just kicking the can down the road. Unless they suffer a very large loss the usual way to avoid CGT is with partial annual disposals. If you did repurchase the lot could you gift half of them to a spouse to use their allowance?
    • Keep pedalling
    • By Keep pedalling 28th Nov 17, 2:16 PM
    • 4,074 Posts
    • 4,436 Thanks
    Keep pedalling
    • #9
    • 28th Nov 17, 2:16 PM
    • #9
    • 28th Nov 17, 2:16 PM
    Holding shares in a single company, means that any gains you have made over the years can totally vanish overnight, so repurchasing the lot is probably not the best idea.

    You tax bill on that gain is not that high anyway, approx £900 - £1800 depending on your total earning for this financial year, so either pay the tax or do what was originally suggests and split the gain across two financial years.
    • bowlhead99
    • By bowlhead99 28th Nov 17, 2:21 PM
    • 6,991 Posts
    • 12,586 Thanks
    bowlhead99
    ok will just repurchase the lot I think.
    Originally posted by mubeye
    You really don't need to repurchase all of them. It's probably smarter to do the maths at some point soon and decide how many you would have been intending to sell if you had been thinking about staying within the annual exempt amount.

    If you don't mind keeping them long term you might want to leave a bit of headroom to sell shares of other companies later this tax year without running out of exemption. But buying *all* of them back seems a bit extreme.


    If you buy back, effectively the sale you made two days ago gets matched with the purchase you make in the subsequent 30 days rather than the purchases you made in the distant past which created the big gain. However there may still be some minor gain or loss - for example if you originally bought at 10p, then sold last week at 100p, and buy all of them back at 98p, you still have 2p profit on all the shares, and the next sale in the future (eg at 200p) will use the original 10p cost for CGT purposes. Likewise if you buy back at 103p you have 3p loss on all the shares, but you still have the gain to come in the future and haven't used up any of your exemption.

    bed and breakfast rules seem more about crossing tax years
    The 30 day rule was put in place to stop people selling shares on the last afternoon of a tax year, and then buying back the exact same quantity and type of shares the next morning in a new tax year... and claiming all the shares they are now sitting on are new shares and they've used their exemption for last year on a "fake" sale-and- rebuy with the pile of shares having a new higher cost so lower future tax bill.

    But the logic extends to any sale and repurchase the same day or within 30 days. If it was only a rule to stop people doing it on day 365 of a tax year, people would get around it by doing it on day 250 of a tax year instead. Basically people would get away with fake sales having no commercial purpose other than to dodge tax.
    and can't find crystal clear statement it is okay for me to do this, but I think my heart is in right place
    It is fine. You are just saying the sale two days ago was a fake sale and the proceeds of x number of shares on that sale should be matched with the purchase cost of x number of shares on the repurchase date a few days later. Rather than having them matched with the first purchase date aeons ago.
    • mubeye
    • By mubeye 28th Nov 17, 2:59 PM
    • 107 Posts
    • 9 Thanks
    mubeye
    Great this is all good news.

    I have just repurchased 75%. It is kicking the can sure, but it's a long term investment so should be able to trickle it into an isa over next few years.

    The fund was a USA all cap tracker, so "relatively" risk free to buy back into (vs bitcoin for eg!) Quite possible it could crash given current high valuations, but it would have to dip a lot by April to match the 2k tax bill (i've already used a lot of my CGT this year...) so i'm choosing to bet it won't dip by that much. Valuations are high, but its not quite dot com, these companies are pumping out real profits. I will sell some more in April.

    I've kept a bit of allowance back as I want to dispose of some riskier shares at some point in next couple of months.

    Thanks for the help. I should probably get a new accountant!
    Last edited by mubeye; 28-11-2017 at 3:10 PM.
    • capital0ne
    • By capital0ne 28th Nov 17, 3:45 PM
    • 146 Posts
    • 80 Thanks
    capital0ne
    Holding shares in a single company, means that any gains you have made over the years can totally vanish overnight, so repurchasing the lot is probably not the best idea.
    Originally posted by Keep pedalling
    Carillion is a fine example - £2.50 - £0.17 in less than a year
    Interserve £3.50 - £0.80 in less than a year
    Babcock £9.70 - £6.70 in six months
    • mubeye
    • By mubeye 28th Nov 17, 3:51 PM
    • 107 Posts
    • 9 Thanks
    mubeye
    Carillion is a fine example - £2.50 - £0.17 in less than a year
    Interserve £3.50 - £0.80 in less than a year
    Babcock £9.70 - £6.70 in six months
    Originally posted by capital0ne
    Yeah true, but in this case it was a USA tracker fund.
    • bigadaj
    • By bigadaj 28th Nov 17, 6:40 PM
    • 10,803 Posts
    • 7,100 Thanks
    bigadaj
    Carillion is a fine example - £2.50 - £0.17 in less than a year
    Interserve £3.50 - £0.80 in less than a year
    Babcock £9.70 - £6.70 in six months
    Originally posted by capital0ne
    But if a theme there....
    • mubeye
    • By mubeye 28th Nov 17, 6:55 PM
    • 107 Posts
    • 9 Thanks
    mubeye
    Hmm , you think these three are leading indicators or something? Main theme Iím interested in is long term trends. Ftse is not showing obvious signs of crashing right now?

    But anyway none of those businesses are listed in the US so probably not the best canaries re the OP.

    Main question is, do I expect USA economy to crash by 2018 apr to extent losses will outweigh 2k Cgt? I think 0% is most likely, (which is a loss in real terms but Iíd take it). A crash is possible but I canít see the start of it personally... and Iím not going to actively short the US right now , I think this run could have a few months left, for all I know.

    Probably more informed people than me, are already seeing it starting to crash, but I canít see it from the stands , so I think holding is safest plan.

    You would sell now and pay the 2k?
    Last edited by mubeye; 28-11-2017 at 7:10 PM.
    • TBC15
    • By TBC15 29th Nov 17, 1:09 AM
    • 264 Posts
    • 87 Thanks
    TBC15
    On a similar subject, am I right in thinking you only need to inform HMRC of disposals over £45200 if you are required to fill in an annual tax return?
    • Ifts
    • By Ifts 29th Nov 17, 5:36 AM
    • 1,762 Posts
    • 1,095 Thanks
    Ifts
    I've kept a bit of allowance back as I want to dispose of some riskier shares at some point in next couple of months.
    Originally posted by mubeye
    You have already repurchased, but if you were holding any shares that are showing a loss and don't stand any chance of recovering you could sell them and use the loss to offset the gain that you have to pay CGT on.
    Never let the perfume of the premium overpower the odour of the risk
    • Keep pedalling
    • By Keep pedalling 29th Nov 17, 9:09 AM
    • 4,074 Posts
    • 4,436 Thanks
    Keep pedalling
    On a similar subject, am I right in thinking you only need to inform HMRC of disposals over £45200 if you are required to fill in an annual tax return?
    Originally posted by TBC15
    If you do returns you have to declare disposals over that amount regardless of whether you have made a taxable gain or not. If you donít do returns you have to declare any taxable gain regardless of the level of disposal.
    • Glen Clark
    • By Glen Clark 29th Nov 17, 10:30 AM
    • 3,907 Posts
    • 2,910 Thanks
    Glen Clark
    Remarkable how many people have a second accident within a few seconds of the first - because they are flustered.
    I suppose repurchasing all the shares, instead of just part, would be the financial equivalent of that.
    ďIt is difficult to get a man to understand something, when his salary depends on his not understanding it.Ē --Upton Sinclair
    • TBC15
    • By TBC15 29th Nov 17, 12:20 PM
    • 264 Posts
    • 87 Thanks
    TBC15
    If you do returns you have to declare disposals over that amount regardless of whether you have made a taxable gain or not. If you donít do returns you have to declare any taxable gain regardless of the level of disposal.
    Originally posted by Keep pedalling
    I take it a taxable gain is anything over £11300?
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